International Business Machines Corp. (NYSE:IBM)’s Latest Cloud Foray Will Upset Amazon (AMZN), Microsoft (MSFT)
International Business Machines Corp. (NYSE:IBM) is on a charm offensive to win the confidence of cloud buyers. At the ongoing National Association of Broadcasters (NAB) 2016 conference in Las Vegas, the company has already announced several media-themed cloud deals.
Comic-con HQ, CBC, AOL and Mazda are some of the media customers International Business Machines Corp. (NYSE:IBM) has signed for its cloud video service. As for the case of Comic-con, IBM has inked a deal with Hollywood producer Lionsgate to backstop a new Comic-con subscription video services. The new Comic-con on-demand video service is expected to launch in July.
Who’s getting what?
In the case of CBC, the broadcaster will use International Business Machines Corp. (NYSE:IBM)’s Clearleap to support its online video live-streaming service. As for AOL, the Verizon-owned company will use IBM’s Aspera to enable it transfer video files faster over the Internet from its far-placed production facilities.
Signing these customers mark a major win for IBM in the cloud given that the company is only playing catch up in public cloud market. From these deals, IBM hopes to unlock more cloud businesses, especially for its cloud video services. But IBM’s gains will worry Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT), which are the leaders in public cloud space.
Clearleap, Aspera and Ustream, which are the pillars of IBM’s cloud video unit, are acquired technologies. IBM has been aggressively buying cloud and video assets to bolster its play in the cloud market.
Cloud computing is among International Business Machines Corp. (NYSE:IBM)’s strategic imperatives, which are new kind of businesses them company is betting on to fuel the next phase of its growth. As IBM looks to unlock new growth, there is no room for error as revenue from its traditional businesses continues to shrinking as in the case of the latest quarter.
IBM posted 1Q2016 revenue of $18.68 billion, down 4.6% and net income fell 13.5% to $2.01 billion, leading to EPS of $2.09, short of $2.33 a year earlier.
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